Nippon Yusen: China Tariffs Hitting Exposed Trade Flows

2025-04-24 08:44:21 ET

Summary

• There is some softening QoQ, but the Red Sea crisis still supports strong results.
• More unimpeached was air transport, but may be a little exposed to outgoing Chinese volumes, although a lot of this segment's activity is probably intra-Asian.
• The concern overall is that there is a fair bit of logistics activity, including in automotive, but more generally in cargo that is US-China.
• While the current tariff spat is unsustainable, weeks of productive activity have been lost and there could be a disappointment from the time of the call when things looked better.
• With all this possibly reflecting in the macro picture, the softening QoQ demand in important segments could continue.

Nippon Yusen Kabushiki Kaisha ( OTCPK:NYUKF )( OTCPK:NPNYY ) trades about in line with other Japanese shipping and logistics picks. While there are upwards revisions in the ongoing Red Sea crisis environment for shipping as we've been covering , depending on an exogenous factor like that is risky and shipping is generally high operating leverage and therefore sees profits move in high amplitude cycles....

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